COMMENTARY: Is the GAR spat putting the HCS Group at risk?
The Golden-Agri Resources-Greenpeace spat has escalated since we wrote about it briefly last week.
To recap, GAR appeared to be losing patience with anti-palm oil campaigners, particularly in Europe. This anti-palm sentiment was underlined by Greenpeace’s overtly anti-palm oil ‘Rang Tan’ video.
Since then, two things have happened.
First, Greenpeace stalwart Andy Tait publicly stated that NGOs have ‘run out of patience’ with GAR.
Second, the Forest People’s Project has come out swinging at GAR, specifically their Golden Veroleum (GVL) project in Liberia. The GVL project has been subject to a number of complaints by FPP, which says that GVL is ignoring the complaints of the Blogbo community.
These complaints were taken to RSPO; GVL subsequently withdrew from RSPO. However, GAR remains a member, and claims that it has ‘no management control’ over the GVL project. According to GAR, this means that its responsibilities for subsidiaries – required under RSPO rules – don’t apply.
This situation now has large implications for both RSPO and the High Carbon Stock Approach (HCSA) Steering Group as well as EU efforts to impose an HCS regulation.
This is speculative, but it’s likely that FPP and other NGOs will want to leverage this situation leading into the RSPO meeting in November. They have already highlighted that a GAR executive sits on the RSPO Board; they’ll try and get a greater commitment out of GAR going into the meeting, perhaps related to lobbying for the High Carbon Stock Approach to be incorporated into the RSPO Principles and Criteria.
But what does this mean for the HCSA Steering Group? GAR – and the rest of Sinar Mas – have been HCSA’s and Greenpeace’s greatest business supporters. If the relationship between GAR, Greenpeace and FPP falls apart, does that mean the entire exercise falls apart?
Greenpeace has its reputation riding on this, too. Greenpeace threw its support behind Asia Pulp and Paper (another Sinar Mas company), only to have to walk back its support. If the same happens with GAR, what options does Greenpeace have going forward?
In our view, the potential fragility of HCSA and other NGO-brokered deals underlines that the player with the strongest potential is government. When a government sets a land-use policy, a planning policy, a conservation policy or a management standard – and can mandate it and enforce it – there is no substitute. This is standard practice in Western countries.
If customers are so keen to have assurances on “no deforestation in practice” or conservation, they shouldn’t be looking to the image of Greenpeace, but to the credentials of a government, and their ability to enforce laws and standards.
Decoding Greenpeace’s new palm attack
Greenpeace’s newest palm oil report is the usual Greenpeace-style blend of big headlines about deforestation and habitat loss, combined with a catalogue of land disputes. The 200-page report is a major swipe at most oil palm plantation operators, ranging from the major companies such as Wilmar to the smaller ones, such as Sungai Budi, which operates in Indonesia.
On the surface, this report links what it refers to as ‘dirty’ palm oil companies to major consumer brands. Its criteria for ‘dirty’ appears to be whether the company has had any complaints against it.
As to be expected in a Greenpeace report, some of the complaints have been resolved through other channels (e.g. RSPO); and it’s also possible that there’s very little substance to some of the claims.
At the surface level, Greenpeace is calling on major consumer brands to exclude these companies from their supply chains – and that’s how media coverage of the report has been framed.
However, there’s more to it than that.
First, what Greenpeace really wants is more support for its High Carbon Stock Approach (HCSA) policies. Its first demand of companies is that they “publish a … policy that requires compliance with the HCS Approach toolkit, the integrated HCV–HCSA assessment manual and credible human rights and labour standards.”
The timing is absolutely critical. Last week marked the final meeting of the RSPO Principles and Criteria Review Task Force. The Task Force has a ‘No Deforestation’ working group; it was tasked with assessing how RSPO’s ‘no deforestation’ policy will look, using HCSA as a reference point.
The Task Force will then take the revised Principles and Criteria to the General Assembly at the end of the year, coinciding with RSPO Roundtable 16.
Second, and related to the above, the report devotes many of its pages to attacking Wilmar. This is a critical move. Wilmar has been a public supporter of HCSA. However, the relationship between Greenpeace and Wilmar became acrimonious when it became apparent that Wilmar was not upholding ‘no deforestation’ policies. In this report, Greenpeace calls on Wilmar not to even trade palm oil that has come from plantations that haven’t committed to HCSA. Greenpeace has asked Golden-Agri Resources (GAR) – another key HCSA supporter – to make similar commitments previously. GAR has described this approach as unproductive.
Again, what Greenpeace wants is a newer and bigger commitment out of Wilmar. It’s also likely that they want a bigger commitment out of GAR, particularly after they said NGOs are ‘losing patience’ with GAR. Is there a new campaign in the offing against GAR in the next few months? Either way, the question remains: is there growing support for HCSA the way Greenpeace sees it? Or is that support crumbling?
Third, Greenpeace wants all data on all companies. This demand sums up the new Greenpeace dilemma. It calls out sustainability consultants, specifically The Forest Trust (TFT) and Proforest. Its major criticism is as follows:
[they are] not ensuring their clients deliver a deforestation-free palm oil industry by 2020. Nor are they prepared to work in a way that allows that goal to be achieved. Instead, TFT and other sustainability consultants are promoting a model that amounts in practice to incremental progress through secrecy and unverified (and unverifiable) reporting.
There is some irony here. TFT was the go-to consultant for Greenpeace when the High Carbon Stock debate commenced in 2010.
The other irony is that what Greenpeace ultimately wants is independent and verifiable auditing in supply chains. What delivers this better than anything else is a robust certification system with independent accreditation. This is precisely the model that ISO (International Organisation for Standardisation) and the International Accreditation Forum (IAF) follow. RSPO comes close, but doesn’t quite make it. Greenpeace, for its part, has always rejected the ISO/IAF approach.
But here’s the problem: Greenpeace dislikes RSPO and won’t participate as a member, but needs RSPO to advocate its position on HCSA. It has tried pushing a simplified version of ‘no deforestation’ policies through independent consultants, but isn’t satisfied with that either.
It is now saying the only solution is for Greenpeace itself to be the industry’s regulatory officer. Is this desperation or an ambit claim?
Either way, RT16 in November – and the campaigns leading up to it – will be very interesting.
ISCC weighs in on ILUC
Certification body ISCC has weighed in early on the Indirect Land Use Change (ILUC) debate that is about to erupt in Brussels as the European Commission determines what its ‘deforestation criteria’ will be for the revised RED (RED II).
Professor Gernot Klepper, chair of the ISCC, presented his general thoughts on ILUC at a recent conference in Malaysia.
Professor Klepper points out the considerable flaws in the ILUC concept as applied by the European Union, summed up in this quote:
Let us do a thought experiment: Suppose all biodiesel in Europe is produced with rapeseed oil from Europe. Also suppose as a consequence, that the food and feed demand cannot be fulfilled in Europe and is met by land conversion to palm or soy plantations outside of Europe which then serve the European food and feed sector. This expansion would surely be counted as ILUC as usually defined and emphasized by the Council. But who would be charged with ILUC? Rape or palm producers? It should be rape and not palm or soy according to the Council’s definition.
Professor Klepper is pointing towards which feedstock gets blamed for ILUC in a number of markets where a range of products can be substituted.
But in our view this critique does not quite go far enough. Klepper is right to point out that there are simply too many variables to determine which actor – or crop – is responsible for indirect land use change. As has been pointed out elsewhere, the substitution effects in global energy and vegetable oil markets are such that increased demand for different oils for different purposes are very dependent on each other.
This is a point that the EU compromise recognises; however, rather than junking the concept, they come up with ways to include and exclude certain biofuels.
Why is this important? Because politically the EU still needs to accept rapeseed biofuels.
- implies that ILUC may be caused by all feedstocks, but this is only ‘high risk’ when the feedstocks themselves cause direct land-use change on high carbon stock areas;
- states that there will be certification for ‘low indirect land use change risk’ fuels; and
- states that improved agricultural practises may mitigate any indirect land-use change impacts from feedstocks, and therefore be considered low-risk provided there is evidence.
These three factors will give European regulators a degree of discretion as to which feedstocks make their way on to the European market. The variables will be a potentially redefined definition of ‘high carbon stock’; criteria for certification of ‘low risk’ fuels; and what constitutes evidence for mitigation.
The distinction between high- and low-risk indirect land use change impacts came from European Parliamentarians rather than the Commission; the clauses on agricultural practises came from Member States; both should be considered political.
ILUC is a nebulous concept at best; the politics behind its use in RED make it even worse. Organisations like ISCC will do their best to work within whatever rules the EU sets down. But better still would be clear, coherent rules and principles backed by robust methodologies. These are yet to appear. The biggest question of all, of course, is why anyone is giving ILUC any serious consideration at all, and thus playing into Europe’s game?
EDF wades into a dangerous rice paddy
The US-based Environmental Defense Fund (EDF) has waded into dangerous territory on greenhouse gas emissions from rice production.
The EDF has stated that wet rice production techniques are responsible for around 1.9 Gt (1,900 Mt) of CO2 equivalent emissions annually.
They put this into NGO-speak by saying this is equivalent to the annual emissions of 600 coal power plants.
Although the EDF is advocating for changes to cultivation techniques, this simply hasn’t stopped the idea that rice is a major contributor to climate change from gaining major headlines in the global media.
It also highlights two things.
First, the rice ‘problem’ greatly outweighs GHG emissions from palm oil. The Centre for Global Development’s analysis of palm oil production put it at 300 Mt for 2009, with most of those emissions coming from land-use change.
Second, the framing of the issue and the media response demonstrates the level of indifference to global development by some Western NGOs and commentators. Rice is the developing world’s most important food staple. Nearly 4 billion people depend on it.
Many NGOs – rightly – are scared to touch the issue of food security and livelihoods versus emissions when it comes to rice. But exactly the same arguments can be made about palm oil and its importance to household incomes across Malaysia, Indonesia, Central and South America and Africa.
USDA revises palm forecast
The USDA has revised its palm forecast scenarios for China, stating that demand for palm will increase slightly, based on a lower crush for soybean – largely on the back of the trade spat between the US and China. However, the USDA forecasts also appear to point out that India is the real weak point in global palm markets right now. This isn’t that surprising; the Indian economy is currently under enormous pressure. A yawning trade deficit has caused the currency to slide, prompting the government to increase tariffs on any number of imported goods – including palm oil.
Unilever throws its weight behind Sabah
Unilever, the world’s largest palm oil purchaser, has thrown its weight behind a number of sustainability initiatives in Sabah. The company made the announcement at the Global Climate Action Summit (GCAS) in San Francisco last week. According to the company, it will provide assistance for certification for an additional 60,000ha of palm in Sabah and restore two wildlife connectivity corridors. This work is being undertaken with WWF, among others. Sabah is seeking to have all of its palm oil production certified to RSPO standards by 2025.
Indonesia Looking Closely at EU’s New Plans for ILUC
Indonesia’s Director General of Trade Oke Nurwan has said the country is wary of the EU introducing indirect land use change into its ‘deforestation criteria’ for biofuels under the revised Renewable Energy Directive (RED II). According to Nurwan, Indonesia is particularly worried about any criteria being introduced that simply have interpretations that are too broad, and will discriminate against palm going forward.